The Shotgun Blog
Wednesday, November 19, 2008
Is now the time to suck $1 billion out of Alberta’s economy?
There was a loud sucking noise heard over Edmonton yesterday, the sound of almost $1 billion being pulled out of the province’s already fragile economy.
The Government of Alberta and Syncrude have reached an agreement that will see $975 million in additional royalities paid to the province between 2010 through 2015. This agreement will provide for the full implementation of the New Royalty Framework, a new tax scheme that is drawing criticism from Alberta’s free market opposition party.
On November 14th, the Western Standard reported that Paul Hinman, leader of the Wildrose Alliance, wants to see the province cancel the New Royalty Framework tax hike and focus instead on cutting government spending:
The engine of Alberta’s economy is beginning to stall. Declining commodity prices and tight credit markets are hurting the province’s energy sector and putting major capital projects on hold.
Alberta’s Wildrose Alliance party says that compounding the challenges facing the oil and gas sector is Premier Stelmach’s costly New Royalty Framework (NRF) tax grab and C02 sequestration scheme, a billion dollar plan to bury C02.
Wildrose Alliance leader Paul Hinman is calling on Stelmach to cancel the NRF and C02 sequestration scheme: "Clearly now is not the time for the government to throw another wrench into the economy."
Hinman is also urging the Alberta Tory government curb spending: “Alberta is skidding out of control."
Posted by Matthew Johnston
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The Alberta government will have an ACTUAL surplus of $2 billion and that's a bad thing?
Once again, I would urge you to check out the facts on when the higher royalties kick in. I'm guessing, since I really don't know how to make factual statements based on fantasy, that it's a much higher price than the current mid-50s.
But then, never let the facts stand in the way of a good story, right?
Posted by: set you free | 2008-11-19 1:16:40 PM
The new framework will kick in in 2010 -- set you free -- as I wrote in my post.
Oilsands developers are making long term calculations and are deciding to hold off on projects. This was before the downturn in oil prices.
Posted by: Matthew Johnston | 2008-11-19 2:23:53 PM
The Oil companies here are not renewing leases on crown or provincial land...that was before the downturn. They are capping gas wells with no plans to pipe them, that was before the down turn too. Sinse the downturn, many projects are being put on hold and some are stopping, as they are, until further notice. Unemployment is very noticeable all of a sudden. The 2 Billion was supposed to be 8 Billion....it isn't.
The City of Calgary is raising taxes by 25% over 3 years. (But are working to cut down on that number...sure) City council is going to build "itself" a 1.6M exercise facility. Must be nice to produce nothing and buy yourself gifts.
These clowns (et al) are spending money like it was somebody else's....Oh that's right isn't it...it IS someone else's money.
Maybe we should get another bureacracy together to keep an eye on them....that ought to fix things!
Posted by: JC | 2008-11-19 7:17:24 PM
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